credit card limits

Always had a problem with bank when applying for a loan in regard with credit cards limits. I always pay of the full amount at the due date .. just use for the 55 day free use of their money and freq flyer points but they want to use the full or near credit limit as a liability., as we all know. Been trying to come up with a win win with them. Just hit on an idea . buy shares (blue) just before applying for a loan.. then the limit becomes an asset ( ie both)and after approval sell the shares hopefully before the free days run out. everyone happy. Hell might even make some $$$ in the share market (or loss) . What do you think ???

Peter_C
 
Hiya

Nice try. You will still have your credit card limit though.

I assume that your "problem" with loans is due to the lenders serviceability calculations and not that you have a negative balance sheet.

My suggestion is that if you require such a large limit that you use a Charge Card, alternatively you might find that the lenders all have different serviceability models. What one says cant be done another is very happy with.

Ta

rolf
 
credit cards

thanks rolf,
But wouldn't it then appear on both sides of your finincials ,which is to say instead of being a negative if would become a nil



Peter_C
 
Hiya

You are right - its a balanced sheet.

BUT you still have to pay the credit card payment each month, and thats what seems to be the issue with your lender.

Ta

Rolf
 
Rolf has been answering this as if it is a debt servicing question while Peter has been assuming it's a loan valuation ratio problem.

Mind you, if you're failing loan applications because of the liability involved in your CC limit, there must be things you can do to address it. I think Rolf is right - they care more about your monthly payments (potential) rather than the limit itself.

regards,

Bob
 
My experience (and many bankers I've spoken to) is the DSR is the trick. Banks models assume you carry a balance of the full limit. Why? Because you can.

Normal action is to request a reduction in your limits while applying for finance.

Regards

Paul Zag
Dreamspinner
 
Pete said:

"....Always had a problem with bank when applying for a loan in regard with credit cards limits........"


Crazy isn't it Pete?

You can of course just cancel your card before the loan application, or more conveniently, just have limit reset to something like $500. Put it back after the loan goes through!

May well add MANY thousands of dollars to your borrowing capacity.

Good luck!


:)
 
Pete,

The trick that I use is that when I am in the Bank Manager's office, if I do have a problem with serviceability, I normally ask the Manager for a pair of scissors. I then take out my Credit Card (with the same lender) and tell them that I'm going to cut it up due to the fact that it is disadvantageous to the loan I am seeking.

You should see their faces....they always 'omit' the credit card from their calculations.

Hope this helps!!!

GlennM.
 
Some banks will totally disregard the credit cards if you can show that you pay them out completely every month for the last 3 months. These lenders include ANZ and StGeorge.

Regards

Patrick
 
Hi,

Originally posted by pobrien3
Some banks will totally disregard the credit cards if you can show that you pay them out completely every month for the last 3 months. These lenders include ANZ and StGeorge.
You can add Citibank to that list.

Cheers
Apprentice Millionaire
 
you guys might like to have a copy of your CRA file before you go for the loan
cos some credit card company doesn't hit on your CRA when you apply for one...
if its not on the CRA list you don't have to tell them that you have a credit card at all

i have 6 credit cards and none of them hit on my CRA so i don't have to declare them when i go for a loan
even i have got 2 NAB credit cards when they ask if i got any credit cards when i apply for a loan with them i say NO cos its not on the CRA list

Good Luck and Take Care

Regards
Jerry
 
G'day all,

My credit card limit is $25,000.
On my application form I state my credit card limit is $1,000.
The banks didn't mention credit levels to me.
I've borrowed on the properties.

Bruce G.

Winners make it happen.
Losers let it happen.
 
quote:
--------------------------------------------------------------------------------
Originally posted by bbruham

My credit card limit is $25,000.
On my application form I state my credit card limit is $1,000.
The banks didn't mention credit levels to me.
I've borrowed on the properties.

Bruce G.

Winners make it happen.
Losers let it happen.

--------------------------------------------------------------------------------

thats good bbruham and well done

but if happens that it appears on your CRA file that they make an enquires on the 25K whatever bank you have the credit card with
and they could knock you back on the loan orelse trying to explain that 25K
Good Luck

Regards
Jerry
 
Originally posted by bbruham
G'day all,

My credit card limit is $25,000.
On my application form I state my credit card limit is $1,000.
The banks didn't mention credit levels to me.
I've borrowed on the properties.

Bruce G.

Winners make it happen.
Losers let it happen.


Hi.I have heard that a 20K Credit card limit can effect your borrowing capacity by 200k,if they find out about it.

Stan Reno.
 
G'day Stan Reno,

That's why I neglected to mention to the banks the limit on my credit card.
You would have to have a brain of a flea to use $25,000 limit at
14 1/2% interest rate.(Commonwealth Bank).
I only accepted the increases as a laugh and to annoy my kids.
A little bit of bragging doesn't hurt from time to time.

Bruce G.
 
Hi,

In wonder... what the bank would say, if you received a letter saying that you can increase you credit card limit, you called the loan manager, and said...

"Hi I just recieved a letter indicating that I can increase my credit card limit"

[loan manager] "That's right"

"So you're saying I can easily service more debt?"

[loan manager] "That's right"

"Great, I want to arrange a increase on my IP loans"

[loan manager] "but, but, but...."

haha :p

Just a thought
Michael G
 
G'day MichaelG.,

I don't know if you are joking or serious, your idea is tops!
Imagine if you can get away with it (and why not?).
If the banks are willing to lend you $25,000 on a credit card, which mainly buys impulsive junk, why not $25,000 for IPs?
At home loan rates of cause! (They have better security for their money).
Perhaps you could hand over your credit card for a specified period of time, you would definitely cause the the bank manager to think.

Bruce G.

Winners make it happen.
Loses let it happen.
 
Hi Michael,

Originally posted by michaelg
In wonder... what the bank would say, if you received a letter saying that you can increase you credit card limit, you called the loan manager, and said...

"Hi I just recieved a letter indicating that I can increase my credit card limit"

[loan manager] "That's right"

"So you're saying I can easily service more debt?"

[loan manager] "That's right"

Actually, when you called the loan manager, he/she would not reply "That's right". Because the letter indicating that you can increase your credit card limit has also in often smaller writing just above where you need to sign, a statement to the effect that you, the credit card holder, recognise and state that you will be able to make all repayments without undue hardship (or words to that effect). So the banks are putting the onus on you to acknowledge that you can service more debt. They will then not acknowledge it, neither for a credit card, nor for any other loan. How do I know that? I tried it! So why the credit card limit increase? Because you might be paying your credit card off in full every month, and they just want to tempt you with more spending (hey, I have a higher limit!), and then get you to pay interest when you cannot pay the card out in full.

Cheers
Apprentice Millionaire
 
Back
Top